Oil drops on jitters about European economy

Monday

Oil prices dropped today on renewed jitters about the European economy.

Benchmark West Texas Intermediate crude slipped 70 cents to $92.62 per barrel in New York while Brent crude gave up 77 cents to $109.14 in London.

Prices jumped last week after European leaders hammered out a deal to lower Greece's debt. But analysts pointed out that Europe will need to slash spending and cut entitlement programs over the next several years to keep budgets in line, and that will hurt oil demand.

The Organization for Economic Cooperation and Development warned that debt crisis will for a "marked slowdown" in the European economy next year.

In the U.S., retail gasoline was flat at a national average of $3.443 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped 54 cents since peaking near $4 per gallon in May, but it's still 63.7 cents higher than it was the same time last year.

In other energy trading, heating oil slipped 2.07 cents to $3.0385 per gallon and gasoline futures lost 4.17 cents to $2.6405 per gallon. Natural gas lost 5.2 cents to $3.871 to 1,000 cubic feet.

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